Example 2: Sale of Interest Sage Corporation is a 90% owned subsidiary of Pan Corporation. Pan investment in Sage at Jan 1, 2016 has a balance of $288,000 consisting of $200,000 capital stock and $100,000 retained earnings plus $18,000 goodwill. Pan Corporation sells 10% interest in Sage Co. (1/9th.) on January 1, 2016 for $40,000 and still maintains 80%. The separate company statements for Pan and Sage appear in the first two columns of the partially completed consolidation working papers for the year ended December 31, 2016. Required: Complete the consolidation working papers for Pan and Sage for the year 2016. Consolidated Pan Eliminations Debit Credit Sage INCOME STATEMENT Sales Income of Sage Cost of Sales and expenses 600.000 $136.000 28.800 (508,800) 100,000) Net income Retained Earnings 1/1 Add: Net income Less: Dividends Retained Earnings 12/31 120,000 36,000 210,000 100,000 120,000 36,000 K 80,000) 20,000) 250,000 116,000 BALANCE SHEET Other Assets 639,200 350.000 268,800 Investment in Sage TOTAL ASSETS Liabilities Capital Stock Other paid in capital Retained Earings (12/31 Noncontrol. Interest 908.000 $350.000 150.000 34.000 500.000 200.000 8.000 250.000 116.000 TOTAL LIAB. & EQUITY 908,000 $350,000